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Is ESG Transparency the Fruit of Corporate Digitalization: Strategic Pathways to Enhanced ESG Disclosure?

Author

Listed:
  • Yanqi Sun
  • Jingtong Wu
  • Tairan Kevin Huang
  • Howard Davey
  • Yuzhong Lu

Abstract

This study investigates the impact of corporate digitalization on environmental, social, and governance (ESG) disclosure, offering empirical evidence from a large panel of Chinese listed firms between 2011 and 2021. Drawing on institutional theory and stakeholder perspectives, we examine how digital transformation enhances firms' capacity to collect, manage, and report ESG‐related information. Our findings reveal that digitalization significantly improves both the extent and quality of ESG disclosure. Mechanism analyses indicate that green innovation and internal control systems serve as key strategic pathways through which digitalization promotes transparency. Furthermore, the effect of digitalization on ESG disclosure is moderated by board diversity in professional and educational backgrounds, and is more pronounced in manufacturing, high‐tech firms, and firms with greater analyst coverage or policy support. These results remain robust across alternative measures, models, and samples, and are further validated using an instrumental variable approach to address endogeneity concerns. The study contributes to the emerging literature on digital sustainability by clarifying the strategic role of digital technologies in advancing corporate environmental performance and disclosure practices. Our findings offer important implications for managers, policymakers, and investors seeking to align technological innovation with sustainable development goals.

Suggested Citation

  • Yanqi Sun & Jingtong Wu & Tairan Kevin Huang & Howard Davey & Yuzhong Lu, 2026. "Is ESG Transparency the Fruit of Corporate Digitalization: Strategic Pathways to Enhanced ESG Disclosure?," Business Strategy and the Environment, Wiley Blackwell, vol. 35(3), pages 3923-3951, March.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:3:p:3923-3951
    DOI: 10.1002/bse.70304
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    References listed on IDEAS

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